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Internet Tycoon Busted for Illegal Texas Hold ’em Ring

The former vice president of one of China’s most popular social media platforms among university-age students appeared on a Beijing television station over the weekend to explain his role in an illegal poker ring busted by police on June 15.

Xu Chaojun, a successful investor and former executive at Renren, a Facebook-like service with 240 million users, stands accused of running illicit poker games involving some 3 million yuan ($446,000), The Beijing News reported Monday.

The arrest took place in Beijing’s Dongcheng District, where Xu and nine others were found playing Texas Hold ’em, a poker variant that has become especially popular in North America, and in which players try to make the best hand possible from two hold cards and five communal cards. All of the players were prominent entrepreneurs who communicated in a WeChat group using code words to discuss bets and payments. As the ringleader of the group, Xu kept a 5 percent cut of every game for himself, resulting in profits of around 100,000 yuan.

“If Xu were merely playing, teaching, and hosting, this would only constitute the crime of gambling,” Zhu Wei, a partner at Zhejiang Carrier Law Firm in eastern China, told Sixth Tone. “But once he takes a commission from the game, it can be viewed as ‘running a casino,’ which carries a more serious charge.”

According to Chinese law, gambling is legal, but only if it does not involve money. If convicted, Xu could face up to three years in prison.

For years, Xu was one of the darlings of China’s tech industry. At just 16 years old, he enrolled at Beijing’s prestigious Tsinghua University to study math, physics, and chemistry, and later held high-level positions at Renren, search engine Sogou, and online game developer Shanda.

Despite enjoying a high profile, Xu has shown an affinity for gambling in the past. In April of this year, he participated in a Texas Hold ’em competition in southern China’s Hainan province that pitted a team of human players against Libratus, a poker-playing AI developed in the U.S. While Libratus defeated all six of the Chinese players, Xu had the best score of any of his teammates.

“The participants involved [in this group] are not professional gamblers, but members of the social elite,” Zhu said. “It is known that Texas Hold ’em is more popular among rich people, so I think this case is intended to send a message.”

Speaking to reporters from behind bars, Xu also acknowledged the social status and relative wealth of his fellow players. “Money is not the issue here,” he said. “For example, a loss of 80,000 yuan doesn't mean much to these people. Their desire is simply to conquer the game.”